4 Ways the Twitter IPO Alters the Future of Digital Marketing

Yesterday, Twitter (NYSE:TWTR) had its long awaited IPO. From a price of $26, to opening at $45.10, then closing at a price of $44.90(an increase of more than 70% from its original IPO price!). For its first day of trading, investors couldn’t get enough of the prized social platform’s stock. Twitter’s first-ever tweet (made by co-founder Jack Dorsey) was dug up from the grave for the company’s coming of age, and was celebrated in its entirety — including the extra “T”:

Market sentiment was overwhelmingly positive, and that got me eager to see what’ll happen next for the darling company. With over 230M MAUs (monthly active users) and 1B tweets generated every other day, Twitter has a lot going for them. However, despite Twitter’s immense growth since its founding in 2006, it currently has a net loss of 69 million from the first half of 2013 — something that prospective investors are eyeing, and something Twitter has to fix fast. Thanks to its IPO, Twitter is now among the highest-valued profitless companies. The IPO proceeds will play a huge role in efforts to fill that loss, but it isn’t clear how Twitter will start making money. In its S1 Filing, Twitter stated below:

“We intend to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. …Additionally, we may use a portion of the net proceeds to acquire businesses, products, services or technologies. …We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering.” – Twitter in its S-1 Form

However, even a shallow understanding of Twitter’s operations can point us in the general direction of where the company is headed. Advertising is the platform’s main source of revenue at the moment, so it isn’t a stretch to assume that it will have a huge role in this. As Troy from here at Powered by Search put so succinctly:

.@UgaaaleJ#TWTR they’re going to have to pay more attention to stock holders. More monetization, more parallel services. Scary for execs

These hints, when taken together, illustrate the direction Twitter will take their ad operations, and what that means for businesses and digital marketing agencies alike in terms of their digital strategy.

I took it upon myself and imagined (or daydreamed) what Twitter would look like down the road, and what sort of services or features it’ll implement to create a richer platform for users and advertisers alike. Here’s a short list of 4 things Twitter would implement to achieve that:

1. Expansion of Cards Features

Since its introduction in 2012, the Twitter Cards program has been integral to the platform’s efforts to allowing developers to integrate rich content into Twitters text driven platform and creating a consistent Twitter experience. Twitter has been continuously adding to its collection of cards, like the lead generation card for advertisers released earlier this year. A huge opportunity for Twitter is to monetize these cards. In particular, there are two ways Twitter can do this: a) leverage the app install and deep linking capabilities of cards and b) drive third party interest in developing for Twitter Cards.

a) App Installs and Deep-Linking

Currently, Twitter Cards support App Installs and Deep Linking into other apps. This means when users click a link to in-app content via the Twitter Card, Twitter users can access that content in its respective app, or install the app if they don’t already have it installed. This a huge opportunity for developers to market their mobile apps and facilitate sales, regardless of whether the app is a mobile game or e-commerce app.

However, Twitter users cannot install apps without first opening the card. This leaves normal tweets (i.e. tweets on the main timeline) unable to drive app installs. This is a huge issue for marketers and e-commerce, as prospective users could be prevented from installing the app and making purchases. By enabling support for App Installs and Deep-Linking on Twitter’s main timeline, developers and publishers will be able to drive installs without the need for users to open the card. This change would be in line with another recent update, which allows attached images and Vines to show in regular tweets without clicking on them, bringing over Cards functionality into the main timeline.

b) Drive Third Party Development for Twitter Cards

Anyone familiar with Twitter’s history can tell you that the platform has a thornyrelationship with the development community. For Twitter to find greater success and tackle Facebook head on, third party development is a critical element that it currently lacks. With the proceeds from the IPO, Twitter can augment Twitter cards and make them more appealing to developers, creating a feature similar to Facebook’s Open Graph.

With the Cards program, third party developers could potentially create apps that allow Twitter users to share their activities in a much richer way than automated, normal tweets. This requires Twitter to provide greater flexibility to their cards to allow the mobile game to show a user’s new high score or a recent purchase they have made.

For the latter, Twitter already supports a “Product Card” that allows online retailers to showcase their products on Twitter. However, there is the potential for third parties to go further and let users promote recent purchases themselves via an app. All they need is greater openness to Cards, greater flexibility, and a whole lot of nudging.

The campaigns that digital marketing agencies create and manage would stand to gain a new level of interactivity with target audiences and the ability to tie channels together much more seamlessly.

2. Greater Access to Twitter’s Social Data

Twitter’s data is a huge differentiator when compared to Facebook or LinkedIn.

Thanks to Twitter’s unique follow structure, users are capable of following accounts that won’t necessarily come following back. this allows for insights into a persons interests and how those interests change over time. Echoing Twitter’s CEO Dick Costolo, it’s a real-time signal of users interests as they evolve.

Currently, Twitter only allows access to this data when purchasing ads on Twitter. Since most models (such as Facebook or LinkedIn) are symmetrical “friending” systems, Twitter’s asymmetric follow model provides much more valuable insights and offers a unique value prop. Expecting increased pressure on Twitter to recover their bottom-line, Twitter will likely allow users to purchase ads using its data that would appear outside of its platform. MoPub, the mobile ad network Twitter recently purchased, will no doubt be an integral factor to bringing Twitter’s social data outside its own walls. MoPub’s efforts to help publishers manage ads on other networks is a huge sign of Twitter’s ability to allow marketers use their data in many more places.

3. Implementation of RTB

Right now, Twitter’s ad products are all native ads. For a platform that prides itself on its brand and its unique characteristics against Facebook or LinkedIn, it’s important to have ads integrated seamlessly into Twitter’s user experience. Mobile ads generate most of Twitter’s revenue, accounting for more than 70%. The company will definitely look to mobile advertising to resolving their net loss. However, this emphasis on native creates a huge issue for Twitter. For marketers, RTB, or Real-Time Bidding, is an important technology, as it allows businesses and agencies to target audiences more precisely. However, ads distributed via RTB conflict with native ads. According to Mr. Ranadive’s post on Medium:

“… One of the hallmarks of native advertising is that the ads blend seamlessly into the consumer experience, and often strongly resemble content. The ads used in RTB retargeting with traditional display are often little more than a call-to-action to buy, with product information, pricing, and a product image. These ads probably look more like ads than content. In the context of native advertising, RTB retargeting ads may therefore not be able to blend in as easily to the consumer experience. Thus, RTB retargeting ads may need to be re-imagined for native ad platforms.”

After reading Mr. Ranadive’s take on RTB vs. native, Twitter has three options to resolve this conflict: 1) alter Twitter to fit RTB; 2) reimagine RTB to fit Twitter; or 3) a combination of 1) and 2). After recent events, it appears that Twitter has already taken initiatives towards the first option. As mentioned earlier, Twitter had implemented a recent update which allows images to automatically appear on Twitter’s main timeline without the need to click on the Tweet.

With this update, RTB ads would be able to seamlessly blend into Twitter’s main timeline without screaming “I’M AN AD” to its users. To Twitter users, it’ll seem like another piece of rich content that they discover on the platform. Combining this update and its recent purchase of MoPub and its technology, Twitter has all the ingredients to bring RTB infrastructure and give marketers to bid on ad products in real time.

4. Greater Emphasis on Location Targeting

Twitter’s platform is deeply rooted in mobile since its founding. Its 140 character limit is perfect for users to share what’s happening where they are, when it’s happening. It’s also no secret that mobile is a huge factor for Twitter’s success; 76% of Twitter’s monthly active users (MAUs) have accessed Twitter via mobile thus far in 2013. Because of mobile’s huge impact, You can definitely expect Twitter to bolster its mobile capabilities.

With GPS being a common feature of modern phones, Geo-targeted and mobile ads are slowly converging. Twitter could easily make the jump to location based ads thanks to the converging of the two fields. MoPub, the mobile advertising company that Twitter purchased back in September, and its partnership with Placecast will allow Twitter to introduce promoted products that take advantage of geo-location. With Twitter’s introduction of push notifications for emergenices, Twitter could additionally allow marketers to push alerts to mobile users when they enter their region and send them a promoted tweet. This brings a whole new dimension to Twitter’s product offering, with geo-fencing and location-based targeting thrown into the mix. To the extreme, Twitter could track which areas users frequent and allow marketers to target users based on the places they visit. And, combined with Twitter’s data, marketers could target users more precisely than ever before.

Bryan Bartlett from Chango seems to mirror (more or less) my sentiments as well, pushing for greater innovation in the mobile ad space:

@UgaaaleJ@poweredbysearch I’d say there will be intense pressure to not lose their innovation, especially in terms of mobile & native ads